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Sunday, September 5, 2010

$1 TRILLION Bought Older, Smaller Forces; Fix it, Mr. Gates

The following report was prepared for the Defense and Acquisition Journal by Winslow Wheeler. It includes some information which is important to understand and directly supports several of my blogs (including the one earlier today) regarding our Defense spending and the tightening Defense budget. I am reprinting it verbatim to preserve the integrity of the reference material and source information:

In 1998, the Pentagon budget was at a twenty-three year low at $361 billion (in constant 2010 dollars). For 2010, the DOD budget was $697 billion (also 2010 dollars, as are all the rest that follow).

According to the analysis of the Project on Defense Alternatives, between 1998 and 2010 Congress appropriated to the Pentagon $2.144 Trillion (with a “T”) more than was anticipated by the 1999 “baseline.” Of that amount, $1.113 Trillion was spent on the wars in Iraq and Afghanistan, and $1.031 Trillion was added to “base” (non-war) Pentagon spending. (See p. 3 of PDA’s study, “An Undisciplined Defense: Understanding the $2 Trillion Surge in US Defense Spending.” I basically concur with PDA’s numbers, which are from DoD and OMB budget data as described on p. 61.)

What did you get for that extra $1 Trillion? Basically, you got a smaller Navy and Air Force and a tiny increase in the size of the Army. As an extra bonus, the hardware those forces use are now older than they were in the Clinton administration in 1998.

How can that be?

Each year the Defense Subcommittee of the House Appropriations Committee publishes the size of the major components of the Army, Navy, and Air Force in its committee report for the Department of Defense Appropriations bills. (Find these data in the early pages of these documents at http://​thomas​.loc​.gov/​h​o​m​e​/​a​p​p​r​o​p​/​a​p​p​1​1​.​h​tml.) The tables the HAC-D publishes are not particularly user-friendly, but they are an apples to apples count of Army brigades, Navy ships, and Air Force squadrons.

In 1998, the active duty Air Force, plus the Air National Guard, plus the Air Force Reserve had 108 squadrons of fighter and attack aircraft and long range, heavy bombers. In 2010 it had 72 of the same, a decline of 36 squadrons or 33 percent. (This decline may be a conservative estimate; the count of squadrons does not embrace the thinning out of some squadrons; the count of actual combat aircraft may have declined more than the count of squadrons.)

The Army is an exception, but the amount of increase is rather pathetic. In 1998, the Army tallied 10 divisions plus three independent brigades. I calculate that to amount to 43 brigade combat team equivalents (based on the number of maneuver battalions in classic divisions and in modern brigade combat teams). In 2010, the Army tallied 1 division, plus 42 Heavy, Infantry, and Stryker brigades, making a total of 46 combat brigade equivalents. That’s an increase of three brigade combat team equivalents, or 7 percent.

The cost of that Army “expansion” was considerable. Army appropriations in 1998 were $90.5 billion (2010$); in 2010 the non-war (base) Army appropriation request was $140.3 billion (2010$). A 55 percent increase in money produced a 7 percent increase in the force. (Again, this calculation is conservative, Army war funding, not counted here, has included significant amounts for base-Army activities, such as “modularity” [i.e. converting from divisions to brigade combat teams]).

The substantially smaller, much more expensive defense inventory is not — on average — newer and more high tech. It is older (in adition to being smaller). As the Congressional Budget Office has periodically assessed, not only have most parts of our hardware inventory grown older, the officially approved plan is mostly for that negative trend to continue. (See CBO’s analysis [“The Long-Term Implications of Current Defense Plans: Detailed Update for Fiscal Year 2008″] at http://​www​.cbo​.gov/​d​o​c​.​c​f​m​?​i​n​d​e​x​=​9​043. )

Donald Rumsfeld (2001–2006) is generally acknowledged to be the most incompetent secretary of defense since — well — Donald Rumsfeld (1975–1977). Since 2006, his successor has come to seek some terminations in DOD acquisitions — most prominently the F-22 — and to transfer $102 billion from overhead (bloat) to “force structure” (hardware). However, the last two DOD Selected Acquisition Reports (available at http://​www​.acq​.osd​.mil/​a​r​a​/​a​m​/​s​ar/) show the number of major defense acquisition programs to have increased from 89 to 91 programs, and GAO has measured the cost growth as now larger than even. (See GAO’s two reports, “Defense Acquisitions: Assessments of Selected Weapon Programs” for 2009 and 2010 [GAO-09-326SP and GAO-10-388SP] at www​.gao​.gov.) Finally, that $102 billion efficiency drive being pursued by Secretary Gates is over five years. The current Pentagon budget plan is to spend $3.245 Trillion over that period. In other words, the much touted Gates plan would shift from overhead to hardware just 3 percent of the planned spending.

If the soft-spoken Secretary Gates is to avoid the derision generally slung at the blustering Secretary Rumsfeld, the former will need to do more — a lot more — to evade a legacy of failure. Gates’ highly effective soft spoken technique of overpowering Congress when he wants to. and his mutually reinforcing relationship with President Obama will be seen by history as wasted assets if the secretary does not not mobilize them for a far more pervasive program of real reform to help the Pentagon survive, even prosper, in the coming age of scarce money.